Changes to EPS Lumpsum Withdrawal and Family Pension Scheme
The Ministry of Labour and Employment has issued two notifications amending the rules under the Employees’ Pension Scheme (EPS) on June 14, 2024.
1. Lumpsum Withdrawal from EPS for Early Exit (Before 10 Years):
- A revised “Table D” clarifies how to calculate the lumpsum amount received by employees leaving EPS before 10 years.
- Previously, service exceeding 6 months counted as a full year. Now, months of service are used for a more precise calculation.
2. Family Pension Scheme (‘Table B’):
- This scheme existed before EPS (1995).
- It calculates pension benefits based on a “factor” assigned by “Table B” depending on years of service.
- Previously, “Table B” only provided factors for up to 34 years of service.
- The amendment adds factors for those who completed more than 34 years but less than 42 years of service between November 1995 and exit from EPS.
- This helps estimate the potential pension liability for employees covered under the earlier Family Pension Scheme.
Overall:
- The changes aim for a more accurate calculation of lumpsum withdrawals for early EPS exits.
- The Family Pension Scheme amendment helps manage potential pension liabilities.